Huami Corporation, a Chinese manufacturer of low-cost wearable devices backed by smartphone maker Xiaomi, raised a smaller-than-expected US$110 million in a public float on the New York Stock Exchange today. The offering, which was less than the hoped for US$150 million, gives Huami a market valuation of US$690 million, much lower than its previously rumored US$1 billion price tag.
Media had been giving Huami a US$1 billion valuation as early as 2016, likely due to rumors promoted by Huami or people close to the company. But following the disappointing IPO, the smart wrist band maker joins China Money Network’s "Fallen Unicorn" list, along with Baidu Waimai, Le Sports and e-book reader ZhangYue.
The company, backed by Banyan Capital, Morningside Ventures and Shunwei Capital, issued 10 million shares at US$11 apiece, the mid-point of the anticipated range of US$10 to US$12. Its shares traded slightly higher during its first day, closing at US$11.25 on February 8th in local trading. Credit Suisse, Citi and China Renaissance acted as lead managers on the deal.
According to Huami’s IPO prospectus, it raised US$40.6 million in a series A round from Banyan Capital, SCC Venture, Morningside Ventures in 2015. It later completed a series B round, but details were not given.
Despite losing its unicorn status, Huami’s IPO should prove lucrative for its early backers including Banyan Capital, Morningside and Shunwei. Chinese smartphone maker Xiaomi Inc. and Shunwei Capital, a venture capital firm co-founded by Xiaomi chief executive officer Lei Jun, owned 19.3% and 20.4% of Huami before the IPO. Their shares will be diluted to 17.8% and 18.8% after the IPO.
Banyan Capital owned 9.7% of Huami before the IPO, and will see its stake reduced to 9.3% after the float. Other major disclosed shareholders including Wang Huang, Huami’s chairman and CEO, as well as other management team members.